Health insurance body proposes standard definition to regulator

New Delhi: With the goal of clarifying the definition of a pre-existing disease condition, the General Insurance Council (GIC), an umbrella organization for all non-life insurance companies, has come to the conclusion that any ailment, which the policyholder contracted within four years prior to taking out a policy, would be treated as a pre-existing condition for insurance billing purposes.

However, coverage benefits would only be available to the policyholder after four years of continuous coverage. Currently, the industry does not have any standard definition for pre-existing diseases.

“GIC has made a recommendation to the Insurance Regulatory and Development Authority (Irda) for a standard definition of pre-existing diseases,” said K.N. Bhandari, secretary general of GIC. “Although all the non-life insurance companies have agreed to the definition, the date for adoption of the definition has to be decided by Irda.”

The standard definition proposed to Irda for pre-existing conditions says it is: “Any condition, ailment, injury or related conditions for which you (policyholder) had signs, symptoms and/or (were) diagnosed (with) and/or received medical advice, treatment (for), within 48 months prior to your (policyholder) first policy with us (the company).”

The second part of the definition talks about exclusions. The exclusion clause says benefits would not be available for any condition(s) as defined in the policy until 48 months of continuous coverage have elapsed since the start of the policy. However, the time frame of four years under the exclusion clause may vary from plan to plan, but cannot be more than four years.

“A standard definition of pre-existing disease will help in streamlining the claim settlement process,” said C.S. Rao, chairman of Irda, the insurance regulator. Rao declined to comment on the deadline for adoption and said insurance companies would themselves incorporate the definition.

That’s a view shared by many other insurance companies. “The industry initiative is towards standard definition and transparent wording so that the consumers understand what they are going to pay for,” said C. Chandra Shekhar, chief marketing officer of Apollo DKV Insurance Co. Ltd. “It will also help in settling majority of the cases with the ombudsman on disputes that could arise mainly because of a misunderstanding of the pre-existing disease clause.”

However, a senior official of a New Delhi-based non-life insurance company said, on the condition of anonymity, that the definition is still incomplete. “There are many health symptoms such as diabetes and hypertension, which are seeds of many other diseases,” he said. “The existing definition of pre-existing diseases should clearly say whether it will cover diseases that are a fallout of such diseases.”